Speaking to Reuters at his atelier in the basement of a former brewery in Berlin's Prenzlauer Berg district, Ai was more outspoken about China's one-party system than he has been in a series of interviews with German media in recent weeks.

BERLIN—Turmoil in the Chinese stock market and currency suggest the country has reached a "critical point" where the absence of democratic freedoms is a growing threat to economic stability, Chinese artist and free-speech advocate Ai Weiwei says.

Speaking to Reuters at his atelier in the basement of a former brewery in Berlin's Prenzlauer Berg district, Ai was more outspoken about China's one-party system than he has been in a series of interviews with German media in recent weeks.

Last month, Chinese authorities abruptly returned Ai's passport, which they had confiscated four years ago after secretly detaining him for 81 days.

He arrived in Germany two weeks ago and was reunited with his son and partner, who have been living in Berlin for nearly a year.

"I think it reflects a kind of critical point," the 57-year-old said of the plunges in Chinese stocks and devaluation of the yuan currency.

In his first published interview with an international media outlet since he left China, Ai said the rapid growth rates of the past years were built on cheap labor and the vastness of the Chinese market, but these advantages were fading and Communist party leaders did not know how to respond.

The only way to maintain the economic momentum was to set the foundations for more creativity and competition by opening up Chinese society, a direction Ai said the government was "openly refusing to go in."

"In China today, they [have used] state power to try to play with the cards. But they don't have enough cards. The end of the game comes," Ai said, relaxed in an untucked white shirt and shorts, snapping pictures with his mobile device during the interview for his closely followed Instagram account.

"If you count the cards, they have a few cards lacking. They know it. So it doesn't matter how they pretend. It's not going to turn out in a way that satisfies them," he added.

Ai was criticized by human rights campaigners in China after an interview he gave with Germany's Sueddeutsche Zeitung daily last week in which he appeared to soften his criticism of the Chinese government, expressing understanding for their actions and saying the police had a right to arrest people.

The comments came amid a deepening crackdown on dissent in China that has targeted human rights lawyers and journalists.

Asked whether his remarks to the German paper had been misunderstood, Ai stuck to his guns and said others had a right to criticize him, just as he had a right to say what he believed.

"You cannot just [dismiss] the other side as evil, which is too simple and it will not solve any problems," he said, referring to the Chinese authorities.

Dissident Label

Ai is often described as China's most high-profile artist, dissident and political activist but he rejected those labels, calling himself a "human being" and nothing more.

"All those titles have been put on me," he said. "I don't care to be called an artist or dissident, that's what other people put on me. I don't like those hats."

Still, he did not shy away from criticizing the Chinese system, saying a paradoxical mix of free enterprise and state control over decades had created "a lot of monsters" and a very unstable society.